Taiwan Semiconductor Manufacturing (TSM) riding the impulse wave

Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) operates as the world’s leading semiconductor foundry, powering the global AI and computing evolution. As demand for advanced chips surges, the stock has broken into new high territory, confirming a powerful bullish cycle is now in force.

Today, we decode the Elliott Wave pattern driving this strategic breakout. Furthermore, our analysis provides a clear technical roadmap with specific targets for its continued ascent. The convergence of strong sector momentum and a clear wave structure creates a compelling technical opportunity.

Elliott Wave analysis

TSM began its rally from the 2022 low, unfolding in a clear three-wave structure. First, wave I peaked at $226.40. Then, wave II pulled back sharply to $134.25. Afterward, the stock surged to new all-time highs, entering wave III. Notably, wave III also displays a three-wave advance, now entering the equal legs zone between $301.59 and $341.06.

At this stage, TSM should see further upside to complete the five-wave sequence of wave III by the end of 2025 or in early Q1 of 2026. After that, a corrective wave IV pullback may follow presenting another buying opportunity. Eventually, the bullish cycle could resume, targeting the 1.618 Fibonacci extension near $404.

TSM weekly chart 10.20.2025

Conclusion

TSM shows a strong bullish sequence on the weekly chart. Therefore, investors should treat pullbacks as strategic buying opportunities. Use our Elliott Wave strategy to time entries with precision. Enter after the stock completes a 3-, 7-, or 11-swing correction. Moreover, our proprietary Blue Box system highlights high-probability zones with exceptional accuracy. As a result, this disciplined approach offers clarity and confidence to capture the next bullish leg.